]]>Bank Account Garnished? Here’s What To Do Nowhttps://www.debtfreecolorado.com/2014/07/31/bank-account-garnished/
Thu, 31 Jul 2014 22:11:32 +0000https://www.debtfreecolorado.com/?p=1354You’re checking out at the grocery store and the debit card is declined. That can’t be right, I just got paid yesterday, you think. You call your bank to find out what the problem is and they tell you that you’re overdrawn by $150 because a creditor has garnished your bank account. Many people who face [...]

]]>You’re checking out at the grocery store and the debit card is declined. That can’t be right, I just got paid yesterday, you think. You call your bank to find out what the problem is and they tell you that you’re overdrawn by $150 because a creditor has garnished your bank account. Many people who face this type of situation think that the money is lost. However if you act quickly, you may be able to recover some or all of those funds.

Lawsuit and Judgment

Most garnishments of bank accounts in Colorado, also known as bank levies, start with a lawsuit against you. In that lawsuit, a court determined that you were responsible to pay a debt and granted the party which sued you, the creditor, the right to collect that money. In Colorado, judgment creditors most commonly collect what’s owed by garnishing wages, placing liens on real property like your home, and levying bank accounts.

Writ of Garnishment

To levy the account, the creditor serves your bank with a legal document known as a Writ of Garnishment. Upon receiving this writ, the bank freezes any money in your accounts in preparation to turn it over to the creditor. The bank will probably freeze money in any account in which you have an ownership interest even though the money’s not really yours, including accounts with your children. For this reason, custodial accounts are generally a better option for your kids’ bank account than joint ownership.

Claim of Exemption

Once the levy is in place, your bank will normally notify you, and the creditor must serve you with the writ. You have 10 days from the time that you are served with the writ to file with the court another legal document called the Claim of Exemption. You should have an attorney help you with this, but you are essentially telling the court that the funds that were in your bank account at the time of the levy were exempt, or protected from your creditors. The court will set a hearing date to determine which portion of the funds is exempt.

Various exemptions may apply depending on the source of the money in the account. For example, in Colorado wages are 75% exempt, and disability, unemployment, social security, and other types of funds are 100% exempt from most creditors (taxing, child support, and other administrative agencies have special rules that apply). Because the exemptions apply to specific sources of money, it’s best if you don’t commingle, or mix together, your income. For example, all of your wage income should go into a separate bank account from your spouse’s unemployment income. This makes it easier for the bank to protect exempt funds from your creditors, and makes it easier to show the court which exemptions apply to the money that’s been levied.

Alternatively, if you file bankruptcy before the funds have been transferred to the judgment creditor, you may have a chance at getting some or all of them back as well.

Stopping Future Levies

Unlike a wage garnishment, a bank levy doesn’t continue until it’s satisfied. The levy is only effective as to the funds that are in the account at the time its served on the bank. However, a judgment creditor may levy the bank again and again in the future. As such, you should keep funds out of bank accounts until the debt is resolved. Certain types of money, including Social Security, Supplemental Security Income, Veterans Affairs, and others, are protected from most of your creditors as long as you follow the guidance in this post. The bank account levy is also a good indicator that your wages may soon be garnished, so you should take action right away the resolve the debt. There are several ways to do so, including chapter 7 bankruptcy, chapter 13 bankruptcy, debt settlement, or even reopening the civil case in which you were originally sued and fighting it.

]]>Can I Keep my House if I File Chapter 7 Bankruptcy in Colorado?https://www.debtfreecolorado.com/2011/10/12/can-i-keep-my-house-if-i-file-bankruptcy-colorado/
Wed, 12 Oct 2011 17:55:40 +0000https://www.debtfreecolorado.com/?p=395In Colorado, whether you keep your home after filing a chapter 7 bankruptcy depends on three factors – do you want to keep it, are you current on the payments, and do you have any equity? First, you need to decide whether you want to keep the house. If you owe far more on it [...]

]]>In Colorado, whether you keep your home after filing a chapter 7 bankruptcy depends on three factors – do you want to keep it, are you current on the payments, and do you have any equity?

First, you need to decide whether you want to keep the house. If you owe far more on it than it’s worth, your interest rates are too high, or if it needs more work than you can afford to put into it, you might be better off letting it go in the bankruptcy and buying again in a few years. In Colorado, almost everyone who wants to keep their home and decides that it makes sense to do so is able to.

Second, if you file for bankruptcy when you’re behind on the mortgage, your lender may either demand that you get caught up right away or ask the court for permission to start the foreclosure process. This creates some risk and is better not left to the discretion of the mortgager. If you’re behind it would be wise to talk to an experienced bankruptcy attorney to discuss either getting caught up on payments prior to filing the chapter 7, or to consider a chapter 13 bankruptcy which would allow you to repay arrears over a three or five year period.

Finally, the bankruptcy trustee will be interested in whether you have any equity in the home. That is, is the house worth more than you owe on it? If so, do you have more equity than is protected under your state’s exemption statute (the law that determines what you get to keep in a bankruptcy)? If you don’t have any non-exempt equity, the trustee is not going to be interested in your home. If you do have non-exempt equity, there are steps you can take to minimize it which should be discussed with a knowledgeable chapter 7 bankruptcy attorney in your area.

When considering whether to file for chapter 7 bankruptcy in Colorado, it’s important to remember that all of your dischargeable debts will be wiped out. This includes not just credit card and medical bills, but also the debt you owe on your car and your home. Even though you will no longer owe any money on your home, whether you keep it after filing bankruptcy is largely up to you. The three most common options for your house after bankruptcy are to reaffirm, “stay and pay”, or surrender.

Reaffirm – Reaffirmation is a process in which someone who has filed bankruptcy asks the judge to waive the discharge of a particular debt. With a mortgage or HELOC, you agree that you will continue to make your payments on the house, and that you continue to owe the debt. As long as you continue to make payments, the lender can’t foreclose. However, if you become unable to pay, not only can the lender foreclose, but they can also sue you for the deficiency (the difference between what you owe on the home, including foreclosure costs and other fees, and what they sell it for at auction). One advantage to signing a reaffirmation agreement is that your continued payments will help you rebuild your credit score more quickly. However, reaffirmation of mortgage debt is generally disfavored by the Bankruptcy Court and bankruptcy lawyers in Colorado.

Stay and Pay –To “stay and pay” means to continue paying on the debt without reaffirming. Essentially, you are making payments on a debt that you no longer owe. While this option doesn’t technically appear in the Bankruptcy Code, it is still the most common because most lenders are perfectly happy to let you remain in the property as long as you continue to pay them. They will continue to keep track of what you pay, and when you have paid the full amount that was owed before bankruptcy, they will sign the title over to you. You can even sell the property, although a refinance is tricky but not impossible. The primary advantage to not signing a reaffirmation agreement is that if you are no longer able to pay, the lender can foreclose but won’t be able to sue you for the deficiency.

Surrender – If you don’t want to keep your home, or if the lender is demanding that you sign a reaffirmation but you don’t think it’s in your best interest (for example because you owe far more than it’s worth, or the interest rate is too high), you may simply hand the keys over to the lender and be done with it. The chapter 7 bankruptcy frees you from the debt associated with the home, so you can rent for a few years and buy again when you’re ready without the threat of the lender coming after you.

How assets are treated in bankruptcy can be a complex issue, so it’s always best to contact an experienced Denver bankruptcy lawyer for an analysis of your case.

]]>Can I Keep my Car if I File Chapter 7 Bankruptcy in Colorado?https://www.debtfreecolorado.com/2011/10/05/can-i-keep-my-car-if-i-file-bankruptcy-colorado/
Wed, 05 Oct 2011 18:37:35 +0000https://www.debtfreecolorado.com/?p=385In Colorado, almost everyone who wants to keep their car after filing for chapter 7 bankruptcy is able to do so. Whether you keep it or not depends on the actions of three players: you, the bankruptcy trustee, and the lender. First, you need to decide whether you want to keep the car. If you [...]

]]>In Colorado, almost everyone who wants to keep their car after filing for chapter 7 bankruptcy is able to do so. Whether you keep it or not depends on the actions of three players: you, the bankruptcy trustee, and the lender.

First, you need to decide whether you want to keep the car. If you owe far more on it than it’s worth, your interest rates are too high, or if it’s a lemon, you might be better off letting it go in the bankruptcy and replacing it.

Second, the bankruptcy trustee will be interested in whether you have any equity in the car. That is, is the car worth more than you owe on it? If so, do you have more equity than is protected under your state’s exemption statute (the law that determines what you get to keep in a bankruptcy)? If you don’t have any non-exempt equity, the trustee is not going to be interested in your car. If you do have non-exempt equity, most trustees will allow you to “buy it back” from the bankruptcy estate. This is a matter of discretion and local practice, so you should consult a knowledgeable bankruptcy attorney in your area to discuss the matter.

Finally, do you still owe money for the car? If so, the lender can influence whether or not you decide to keep the car. When you file for chapter 7 bankruptcy in Colorado, all of your dischargeable debts will be wiped out. This includes not just credit card and medical bills, but also the debt you owe on your car and your home. However, even though you will no longer owe any money on your car, whether you keep your car after filing bankruptcy is largely up to you. The three most common options for your car after bankruptcy are to reaffirm, “ride through”, or surrender, and which one you choose depends on the lender’s disposition.

Reaffirm – Reaffirmation is a process in which someone who has filed bankruptcy asks the judge to waive the discharge of a particular debt. With a car loan, you agree that you will continue to make your payment s on the car, and that you continue to owe the debt. As long as you continue to make payments, the vehicle can’t be repossessed. However, if you become unable to pay, not only can the lender repossess the car, but they can also sue you for the deficiency (the amount you owe on the car and repossession costs, and what they sell it for after repossession). One advantage to signing a reaffirmation agreement is that your continued payments will help you rebuild your credit score more quickly.

Ride Through –To “ride through” means to continue paying on the debt without reaffirming. Essentially, you are making payments on a debt that you no longer owe. While this option was technically eliminated when the Bankruptcy Code was rewritten in 2005, it is still the most common. Most lenders will not enforce their right to make you choose between signing a reaffirmation agreement and surrendering the car because they’re perfectly happy as long as you continue to pay them. They will continue to keep track of what you pay, and when you have paid the full amount that was owed before bankruptcy, they will sign the title over to you. The primary advantage to not signing a reaffirmation agreement is that if you are no longer able to pay, the lender can repossess the car but won’t be able to sue you for the deficiency.

Surrender – If you don’t want to keep the car, or if the lender is demanding that you sign a reaffirmation but you don’t think it’s in your best interest (for example because you owe far more than it’s worth, or the interest rate is too high), you may simply turn the car over to the lender and be done with it. The chapter 7 bankruptcy frees you from the debt associated with the car, and you’re free to go out and find something new.

How assets are treated in bankruptcy can be a complex issue, so it is always best to contact an experienced Denver bankruptcy lawyer for an analysis of your case.

]]>I’ve Been Sued by a Debt Collector – What Should I Do?https://www.debtfreecolorado.com/2011/07/07/sued-by-debt-collector-what-should-i-do/
Thu, 07 Jul 2011 19:37:05 +0000https://www.debtfreecolorado.com/?p=211Other than a few traffic tickets, a debt collection lawsuit is most people’s first experience with the legal system and it can be intimidating. This article is designed the give you an overview of the lawsuit process and potential outcomes with the expectation that as you better understand what lies ahead, you will be less [...]

]]>Other than a few traffic tickets, a debt collection lawsuit is most people’s first experience with the legal system and it can be intimidating. This article is designed the give you an overview of the lawsuit process and potential outcomes with the expectation that as you better understand what lies ahead, you will be less likely to make the worst mistake you can commit at this time -sticking your head in the sand and hoping it will go away on its own.

The Summons and Complaint

For most people, the lawsuit process begins when you are served with a summons and complaint. The summons contains basic information about the administrative aspects of the suit including the court when the case was filed and some basic instructions. Probably the most important piece of information on the summons is the return date, or the date on which your creditor will win a judgment against you if you don’t take any action. The complaint sets out the basic argument against you and normally states the reason you’re being sued, the amount you’re being sued for, and the identity of the original creditor if the party suing you is a debt collector.

In some cases, there will be a couple of other blank forms given to you with the summons and complaint. One of the attachments is likely a list of questions about where you work and bank. These questions are designed to make it easier for the creditor to collect the debt in the event that it wins the lawsuit. Because of this, it’s generally best to avoid filling this form out unless you must. Knowing which list of questions you can ignore and which you must complete is the tricky part, especially given that the failure to complete and return court ordered interrogatories can result your being held in contempt of court and a bench warrant being issued for your arrest. Many times these forms will say optional or voluntary across the top, in which case they can be ignored. If not, or you have any question, fill it out and send it back or talk to an attorney.

Filing an Answer

Also attached may be a answer form that you can complete and return to the court setting out any reasons why you should win the lawsuit. If you plan on filing an answer, it would be wise to speak with an experienced debt attorney because they know how to draft this document in a way that minimizes the risk of the creditor using your words against you and increases the chances that the creditor will leave you alone and move on to an easier target. Regardless of whether you prepare your answer yourself or have an attorney do it, you’ll probably want to hold off on filing the answer for as long as legally permissible in order to give yourself more time to look at other options such as chapter 7 bankruptcy, chapter 13 bankruptcy, or debt settlement.

What The Debt Collector Can Do To You

If you don’t take any action or you move through the trial process and lose, the actions the creditor can take against you vary depending on the state you live in. The most common method to collecting on the judgment is a wage garnishment. About 25% of your take-home pay will be removed from your check each pay period until you’ve repaid the judgment amount, filed bankruptcy, or worked out some other arrangement with the creditor. Another popular form of debt collection is to seize the money in your bank accounts. Again, the amount they can seize varies depending on the laws of your state, but unlike a wage garnishment you can reduce the amount taken by simply limiting the amount you have on deposit. Other less common collection methods include repossession of secured assets and placing liens on property.

Get Help

If you’ve been sued by a credit card company or a debt collector, it’s not too late to seek help. Talk to a debt relief or bankruptcy attorney as soon as possible to avoid making mistakes during the lawsuit process, to learn how to protect your assets, and to come up with a plan on how to deal with your debt so you aren’t sued again.

]]>How to Choose a Bankruptcy Attorneyhttps://www.debtfreecolorado.com/2011/06/04/how-choose-bankruptcy-attorney/
Sat, 04 Jun 2011 06:58:40 +0000https://www.debtfreecolorado.com/?p=128With the phonebook filled with page after page of lawyers, how do you choose the best one for you? The first question asked by many people considering filing bankruptcy is whether they even need an attorney. While a complete answer to this question is beyond the scope of this entry, The Administrative Office of the [...]

]]>With the phonebook filled with page after page of lawyers, how do you choose the best one for you?

The first question asked by many people considering filing bankruptcy is whether they even need an attorney. While a complete answer to this question is beyond the scope of this entry, The Administrative Office of the United States Courts offers the following guidance: “While individuals can file a bankruptcy case without an attorney or “pro se,” it is extremely difficult to do it successfully. It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical, and a misstep may affect a debtor’s rights. For example, a debtor whose case is dismissed for failure to file a required document, such as a credit counseling certificate, may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay. Bankruptcy has long-term financial and legal consequences – hiring a competent attorney is strongly recommended.”

Once you’ve determined that you want the help of an attorney, keep in mind the following points when selecting a lawyer to help you through this process:

Don’t wait to talk to someone

Even if you haven’t missed a payment, received a creditor’s call, or decided that bankruptcy is right the best choice for your family, there are a number of ways in which you can benefit from meeting with an experienced bankruptcy attorney. First, a good attorney can tell when someone doesn’t need to file bankruptcy and will give you suggestions on other ways to address your debt that you may not have considered. Second, an attorney will help you avoid the common mistakes made prior to filing bankruptcy that cause problems and cost money down the line. Additionally, the more time an attorney has to work with you prior to filing the case, the better your bankruptcy will be. Finally, once you’ve hired an attorney the vast majority of your creditors will stop calling you, which can be a huge relief.

Price should be just one of many factors you consider

If you’re contemplating bankruptcy, the last thing you want to do is spend more money than you have to. However, resist the urge to base your decision-making solely on attorney’s fees. The primary reason is because price can be misleading. Some firms will advertise a very low price that either doesn’t apply to very many clients, or fails to include some services which are essential to the bankruptcy process.

Another way that price can be misleading is that in bankruptcy, paying a little more upfront for quality work generally winds up saving you a considerable amount at the end of your case. Hiring the cheapest attorney you can find may result in cutting corners, outsourcing the vast amount of work to non-attorneys, or a rushed or sloppy bankruptcy petition. A poorly prepared bankruptcy almost always results in the client surrendering hundreds or thousands of dollars worth of money or property to the trustee that you would have otherwise been able to keep.

When choosing an attorney, keep in mind that you’re not buying a product, but a skilled service. Not all bankruptcies are created equal and you can only file for chapter 7 bankruptcy once every 8 years, so you’ll want make sure it’s done right the first time. A useful question to ask yourself is: Who do I want handling one of the most important legal matters of my life?

Treat the initial consultation like a job interview

You should go into the initial consultation with an attorney with two goals in mind: To learn about your options for dealing with debt, and to decide whether the attorney with whom you meet is the best fit for the job. You don’t have to hire the first attorney you talk to, and probably shouldn’t if you feel pressured to do so.

Bankruptcy is incredibly cooperative, so it is of the utmost importance that you find someone you feel comfortable with and who communicates well. On this point, you should remember that the attorney you meet might not be the person that you communicate with most often. Ask who does the majority of the work on your file – this might be an associate attorney, a paralegal, a receptionist, or data entry personnel – and speak with them.

You may want to ask how many cases the firm filed in the last month. While a big number may sound impressive, it may also indicate that the firm is places more of an emphasis on volume than precision. Ask how the firm can provide you with the personalized service you need.

What other work do they do? While a law office practicing only bankruptcy and debt law is not always going to provide the best experience, a firm that offers a multitude of different services may not have a sufficient emphasis in the unique area of bankruptcy law to give you the best experience. Look for an attorney with genuine interest in helping people with their debt rather some someone who has simply added a bankruptcy desk to existing practice because there seemed to be money to be made. Affiliations with organizations such as the National Association of Consumer Bankruptcy Attorneys or the American Bankruptcy Institute can indicate a genuine interest in and higher level of dedication to bankruptcy law.

You’re the star of the show

In the end, remember that whether you have a mediocre bankruptcy attorney or a really good one, your lawyer can’t do anything without your full participation and cooperation. If you make the decision early on to be the best client possible, you will find the whole process to be much easier and maybe even enjoyable.

]]>Offers for debt settlement and debt repayment plans often sound too-good-to-be-true. According to the Consumer Financial Protection Bureau “a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly”, Freedom Debt Relief’s offers actually were too-good-to-be-true.

In a recent lawsuit, the CFPB alleges that “Freedom charges consumers without settling their debts as promised, makes customers negotiate their own settlements, misleads them about its fees and the reach of its services and fails to inform them of their rights to funds they deposited with the company.”

“Freedom took advantage of vulnerable consumers who turned to the company for help getting out of debt,” said CFPB Director Richard Cordray. “Freedom deceived consumers about its clout with creditors that it knows do not negotiate with debt-settlement companies, made some customers negotiate on their own, and misled consumers about its fees and their accounts. Today’s lawsuit seeks to stop the deception and get compensation for consumers Freedom cheated.”

CFPB alleges Freedom Debt Relief:

Misleads consumers about creditors’ willingness to negotiate: Freedom markets its “negotiating power,” but Freedom knows that certain major creditors have policies against negotiating with debt-settlement companies. Freedom does not make clear to consumers that they may need to handle the negotiations with those creditors themselves.

Deceives consumers about the extent of its services: Freedom leads consumers to believe that the company’s experienced negotiators will deal directly with their creditors. But after they enroll with Freedom and deposit funds into an account, some consumers learn that Freedom offers only guidance or “coaching” on how to negotiate settlements on their own.

Deceives consumers about its fees: Freedom falsely claims that it charges consumers only when it negotiates a settlement of a debt and consumers make a payment under the terms of the settlement. In fact, Freedom charges consumers its full fee even when creditors simply stop collection efforts in the absence of a negotiated settlement and consumer payment and when it takes no action on a consumer’s account.

Fails to disclose consumers’ rights to funds: Freedom does not clearly and conspicuously inform consumers that they are entitled to get back the funds in their accounts if they leave the debt-settlement program.

If you have used the services of Freedom Debt Relief, you’ll want to keep an eye on this lawsuit as you may be entitled to damages. If you’re considering hiring Freedom Debt Relief or another debt settlement or debt consolidation provider, perhaps it’s time to reconsider.

In 2008, Colorado enacted the Colorado Uniform Debt Management Services Act (DMSA), which “regulates companies that offer and provide debt management services to Colorado residents.” The Consumer Protection Section, Consumer Credit Unit of the State Of Colorado Department of Law published an “Information for Consumers” handout which explains the following with respect to debt management in Colorado:

You may be able to negotiate a favorable settlement yourself, without paying fees to debt
settlement providers, by contacting your creditors directly.

Creditors are not required to participate in or cooperate with a debt management or settlement
plan.

If you are overwhelmed by debt, schedule a free consultation with an experienced debt relief lawyer who will give you all of your options so you can make an informed decision on the best way to proceed. The Law Office of Clark Daniel Dray – (303) 900-8598.

]]>Bankruptcy and Your Credit Report – Frequently Asked Questionshttps://www.debtfreecolorado.com/2016/11/02/bankruptcy-credit-report-faq/
Wed, 02 Nov 2016 18:47:22 +0000https://www.debtfreecolorado.com/?p=3552How Does a Bankruptcy Affect my Credit Score? If you've been doing a great job making payments on your debts, bankruptcy will have a significant impact on your credit score in the short term. However, by the time you start thinking seriously about bankruptcy you've probably either started missing payments or are on the verge of doing [...]

If you’ve been doing a great job making payments on your debts, bankruptcy will have a significant impact on your credit score in the short term. However, by the time you start thinking seriously about bankruptcy you’ve probably either started missing payments or are on the verge of doing so. If that’s the case, the bankruptcy will help you turn things around per a recent piece in the Los Angeles Times:

Filing for bankruptcy may have actually helped your scores. Researchers at the Federal Reserve Bank of Philadelphia found scores typically plunged in the 18 months before people filed for bankruptcy and rose steadily afterward. The average credit score before someone filed Chapter 7 was 538.2 on Equifax’s 280-to-850 scoring range. By the time filers’ cases were discharged, their average score was 620.3.

How Long Does Bankruptcy Stay on my Credit Report?

Will I be Able to Get Credit After Bankruptcy?

Absolutely. My clients frequently report that within days of their bankruptcy being filed their mailboxes are filled with offers for vehicle financing, credit cards, and other loans. They’re not great offers, though. Interest rates, annual fees, and other costs of credit will be very high until you can start to rebuild your credit.

Can I Buy a Home After Bankruptcy?

If you’ve rebuilt your credit, you can buy a home between one and four years after your bankruptcy discharge, depending on the type of loan (VA, FHA, conventional, etc.). See this chart by mortgage banker James Spray for more specifics.

How do I Rebuild my Credit Score After Bankruptcy?

While the old saying time heals all wounds may or may not be the case with respect to a broken heart, it is central to credit repair after bankruptcy. Again from Equifax, while the bankruptcy shows up on your credit report for years,

as time goes by and you begin to reestablish your credit, the bankruptcy notations will begin to affect you less and less until they are purged automatically from the report.

You shouldn’t just sit around waiting for the bankruptcy to drop off the credit report, though. There are several steps you should take after your case is filed to rebuild your credit score:

Review your credit report and file disputes where the bankruptcy isn’t being reported properly. You can get your free credit reports once a year at annualcreditreport.com.

Get and use a secured credit card. A secured card is one where you put down a deposit and the lender gives you a card in the same amount. Don’t ever max it out, and pay it down completely each month.

Consider reaffirming a vehicle loan so that payments continue to report to the credit bureaus.

You apply for the loan, whether you have bad credit or no credit, and you are approved, but there’s a safety net for the lender. The money you borrow is deposited in a savings account — one that you cannot access until you have fully repaid the loan. If you pay the loan as agreed, the financial institution promises to send a good report to the credit bureaus. A 2013 study showed an average improvement of 35 points with six months of on-time payments for loans as small as $100.

To schedule a free consultation with an experienced bankruptcy lawyer, call The Law Office of Clark Daniel Dray at (303) 900-8598.

]]>Bankruptcy Means Test Median Income by State – After April 1, 2017https://www.debtfreecolorado.com/2016/10/15/bankruptcy-means-test-income/
Sat, 15 Oct 2016 09:18:39 +0000https://www.debtfreecolorado.com/?p=3533Your household income is an important element in determining whether you are eligible for a Chapter 7 Bankruptcy and calculating the payment amount and duration of a Chapter 13 Bankruptcy repayment plan. The bankruptcy means test compares your income to the median income for the same size household in the your state. If you make less than [...]

]]>Your household income is an important element in determining whether you are eligible for a Chapter 7 Bankruptcy and calculating the payment amount and duration of a Chapter 13 Bankruptcy repayment plan.

The bankruptcy means test compares your income to the median income for the same size household in the your state. If you make less than the median, you’re presumed to qualify for a Chapter 7 or you are eligible for a Chapter 13 plan that ends after 3 years of payments. If you make more than the median income, you may need to file a Chapter 13 which lasts 5 years. However, in some instances you may still be able to file a Chapter 7 Bankruptcy notwithstanding your above-median income, which is why you should always speak to an experienced bankruptcy lawyer to help you understand your options.

The following chart is effective for bankruptcy cases filed on or after April 1, 2017. The median income changes periodically, and the current figures can always be found here.

]]>Heupel Law Closed, Website Downhttps://www.debtfreecolorado.com/2016/03/11/heupel-law-closed-website-down/
Fri, 11 Mar 2016 19:36:40 +0000http://www.dray.dreamhosters.com/?p=3260High-volume Denver bankruptcy law firm Heupel Law has closed it doors. As of 7 March 2016,the website for Heupel Law, http://www.heupellaw.com, was offline. Before going offline, the website bore the following message: Heupel Law currently ceased operations as of February 28, 2016. At this time, it is unclear if and when the firm may reopen. Calling [...]

]]>High-volume Denver bankruptcy law firm Heupel Law has closed it doors. As of 7 March 2016,the website for Heupel Law, http://www.heupellaw.com, was offline. Before going offline, the website bore the following message:

Heupel Law currently ceased operations as of February 28, 2016. At this time, it is unclear if and when the firm may reopen.

Calling Heupel Law will result in a voicemail suggesting that you email Questions@HeupelLaw.com for information on transferring your case.

If you are in an active bankruptcy, you may have received a document from the Court titled NOTICE REGARDING COUNSEL OF RECORD FOR DEBTOR(S) which states the following:

The matter before the Court is the Order Approving Amended Conditional Admission of Misconduct and Imposing Sanctions pursuant to Colorado Rule of Professional Conduct 251.22, which was entered by the Colorado Supreme Court in case numbers 15PDJ032 and 15PDJ043 on January 14, 2016. Pursuant to the Order, Kevin D. Heupel, Attorney Registration Number 30264, is suspended from the practice of law for a period of one year and one day, effective February 28, 2016. Accordingly, Kevin D. Heupel is no longer counsel of record for Debtor(s).

If you were a client of Heupel Law and have questions about the retainer you remitted to the firm, need assistance in a ongoing bankruptcy case, or are preparing to file a chapter 7 bankruptcy or chapter 13 bankruptcy, feel free to contact The Law Office of Clark Daniel Dray at 303-900-8598.

]]>Two Common Mistakes That Put Your Social Security at Riskhttps://www.debtfreecolorado.com/2016/02/16/common-mistakes-put-social-security-risk/
Tue, 16 Feb 2016 18:50:40 +0000https://www.debtfreecolorado.com/?p=3143Under both federal and Colorado law, Social Security is exempt, or safe, from the vast majority of your creditors. For example, if you are sued by a credit card company and they get a judgment against you, they can’t garnish the Social Security directly from the U.S. Department of the Treasury. However, once those funds [...]

]]>Under both federal and Colorado law, Social Security is exempt, or safe, from the vast majority of your creditors. For example, if you are sued by a credit card company and they get a judgment against you, they can’t garnish the Social Security directly from the U.S. Department of the Treasury. However, once those funds make it into your bank account, two common mistakes put them at risk of being frozen, requiring a fight to get them back, or taken outright.

Mistake #1: Commingling

For the purpose of protecting Social Security funds, commingling mean mixing Social Security with any other money such as wages, unemployment benefits, someone else’s Social Security, gifts, etc. When you mix your Social Security with other funds, it can be argued that the Social Security loses its exempt status and becomes fair game for your creditors. This argument may be overcome in some circumstances, but why create the risk when avoiding the fight is so easy?

What’s the Solution? Open a brand new account at a bank to which you don’t owe any money (for example, don’t open a Chase bank account if you owe Chase money for a credit card, overdraft line of credit, etc.), and make sure that the only money that ever goes into that account is from Social Security. You can pay bills out of the account and withdraw cash like normal (just don’t redeposit it).

Mistake #2: Not Having Your Social Security Directly Deposited Into Your Bank Account

The bank levy process in Colorado is a little bit backwards. A creditor with a judgment against you sends a document called a Writ of Garnishment With Notice of Exemption And Pending Levy to your bank, which immediately freezes all the money in your bank accounts, no questions asked. Then the creditor needs to serve you with the same paperwork. If you don’t file a form called the Claim of Exemption to Writ of Garnishment within 10 days, the bank will release the frozen funds to the creditor. If you do file the Claim of Exemption on time, the court will set a hearing at which you can try to prove that the money in your account is completely or partially exempt and argue that it should be released to you. This is a lot of work and it leaves you without access to your money for weeks while you wait for the process to run its course. See this article for more information about the bank levy process in Colorado and what to do if your account has been frozen.

What’s the Solution? Have your Social Security directly deposited by Treasury into the brand new bank account mentioned above. In 2013, the U.S. Treasury and several other federal agencies amended a rule which now requires banks to protect up to two months of Social Security and other types of deposits (Supplemental Security Income, Veterans Affairs benefits, Federal Railroad retirement benefits, Federal Railroad unemployment and sickness benefits, Civil Service Retirement System benefits, and Federal Employee Retirement System benefits) from levies. So when your bank receives the Writ of Garnishment, it has to look at your account before freezing it. And if it sees that the money in the account is exclusively direct deposited Social Security, it won’t honor the levy.

While these solutions help with the symptoms of debt, they don’t solve the underlying problem; you still owe more than you can afford to pay. Even if most of your creditors can’t touch your Social Security, they’ll come after you in different ways including wage garnishments; liens on your property; constant phone calls, letters, and lawsuits; and negative credit reporting which will make it very difficult if not impossible to get a good credit card, rent an apartment, finance a car, or buy a home. To set up a free consultation and discuss methods for resolving the your debt including settlement, repayment plans, and bankruptcy, call The Law Office of Clark Daniel Dray at (303) 900-8598.

]]>Why You Must List All Your Assets in Your Bankruptcy – Dance Moms Star Abby Lee Miller Indicted on Charges of Bankruptcy Fraudhttps://www.debtfreecolorado.com/2015/10/14/dance-moms-abby-lee-miller-indicted-bankruptcy-fraud/
Wed, 14 Oct 2015 22:04:09 +0000https://www.debtfreecolorado.com/?p=2976"If I don't list it, how will the court know about it?" This is a common question I receive when I tell prospective clients that they need to list all their assets in a bankruptcy. The answer I generally give is "I don't know how the court will find out, but if you hide it and [...]

]]>“If I don’t list it, how will the court know about it?” This is a common question I receive when I tell prospective clients that they need to list all their assets in a bankruptcy. The answer I generally give is “I don’t know how the court will find out, but if you hide it and the court learns about it you risk five years in prison and $250,000 in fines. Is it worth it?”

Dance Moms star Abby Lee Miller will soon find out, having been indicted for bankruptcy fraud related offenses. According to the indictment, Ms. Miller “in knowing disregard of the Court’s Order . . . continued to conceal and attempted to conceal significant sums of business income”.

Abby Lee Miller is the latest in a string of celebrities and pseudo-celebrities to face the wrath of the bankruptcy court. Real Housewives of New Jersey star Teresa Giudice was sentenced to 15 months in federal prison and ordered to pay $414,588 in restitution for failing to disclose income and list assets such as cars and recreational vehicles in their bankruptcy, among other charges. Further, her discharge was revoked so she still owes all the creditors that would have been handled in the bankruptcy and can likely never wipe those debts out in a future bankruptcy.

Pittsburgh Steelers quarterback Michael Vick was accused of making fraudulent transfers to friends and family members prior to filing his chapter 11 bankruptcy in 2008. It should be noted that this issue was resolved and that Mr. Vick appears to have successfully completed the bankruptcy process notwithstanding the early hurdles.

You should make every effort to be as thorough with your attorney as possible. Don’t fail to mention assets because you’re afraid you’ll lose them. Your attorney will discuss creative options to preserve your things and make sure that you don’t give up more than is absolutely necessary. If you fail to disclose, you’ll lose your discharge.

]]>Bankruptcy, Retirement, and Estate Planninghttps://www.debtfreecolorado.com/2014/08/07/bankruptcy-retirement-estate-planning/
Thu, 07 Aug 2014 20:12:49 +0000https://www.debtfreecolorado.com/?p=2294When planning for retirement, you may be focused on saving up the money you'll need to live comfortably after you've left the workforce. And when planning your will and trust, the primary focus is probably making sure that your loved ones are well taken care of by passing down as much of your property possible. Surprisingly, bankruptcy can help you achieve [...]

]]>When planning for retirement, you may be focused on saving up the money you’ll need to live comfortably after you’ve left the workforce. And when planning your will and trust, the primary focus is probably making sure that your loved ones are well taken care of by passing down as much of your property possible. Surprisingly, bankruptcy can help you achieve both of these goals.

Your Retirement Assets Are Safe In Bankruptcy

When money is tight, many people tend to reduce or eliminate retirement contributions before making cuts to credit cards or other unsecured debt payments. This makes sense in the short term – your 401(k) or IRA isn’t going to start calling you as soon as the money stops coming in – but you’ll regret short-changing your retirement when the time comes that you need to rely on it. Additionally, paying down debt becomes much more difficult once you’ve retired, so wiping it out ahead of time will help you stretch those dollars you’ve already saved.

Federal and state laws strongly favor retirement funding over your creditors. First, your creditors are generally barred from taking money out or your retirement accounts like they can with a bank levy. Second, your qualified retirement accounts are safe in a chapter 7 bankruptcy, or chapter 13 bankruptcy (be sure to let your qualified bankruptcy attorney know about any financial accounts you have so that an assessment can be made as to the exemptions that apply). Third, you can and should keep making reasonable retirement contributions even while you’re in the middle of a chapter 7 or 13 bankruptcy. In a chapter 13, federal law even gives you a credit for doing so, reducing the amount of your chapter 13 plan payment, and your retirement contributions can help you qualify for a chapter 7 where you might not otherwise be eligible.

Death Doesn’t Mean The End Of Debt Collection

Your creditors can collect your debts after you’ve passed away. Your estate must settle your accounts before it can distribute assets to your loved ones, and the debt collectors will line up to get paid. This is true regardless of whether you have lots of assets and valuable property or just a few household goods. However, if you’ve filed bankruptcy and discharged your debts the creditors will be barred from collecting in the future, more of your assets will transfer to your friends and family members, and the personal representative of your estate (executor) will have a much easier time doing his or her job without having to fight with debt collectors. It’s too late to file bankruptcy after you’ve died, so this is a tool that you’ll want to take advantage of sooner rather than later.

]]>Bankruptcy § 341 Meeting of Creditors Locations By Countyhttps://www.debtfreecolorado.com/2014/07/23/bankruptcy-341-meeting-of-creditors-locations/
Wed, 23 Jul 2014 21:28:49 +0000https://www.debtfreecolorado.com/?p=2264While there is only one bankruptcy court for Colorado, which is located in Denver, where you live plays a big part in your case. Not only does it determine whether you're eligible for a chapter 7 bankruptcy and dictate allowable expenses in a chapter 13 bankruptcy, but it also determines where your 341 Meeting of [...]

]]>While there is only one bankruptcy court for Colorado, which is located in Denver, where you live plays a big part in your case. Not only does it determine whether you’re eligible for a chapter 7 bankruptcy and dictate allowable expenses in a chapter 13 bankruptcy, but it also determines where your 341 Meeting of Creditors will take place. This can be helpful in choosing a bankruptcy attorney because if you live in Eagle County and your 341 is going to be in Grand Junction, it probably wouldn’t be cost effective to hire an attorney in Denver even though you’re there regularly.

The Colorado Consumer Bankruptcy Association has just published a helpful table which sets out the 341 Meeting location based on county, as well as addresses and maps for the different meeting locations. That post can be found here.